CFTC launches pilot program allowing tokenized digital assets as collateral in derivatives

Source: PortaldoBitcoin Original Title: CFTC tests tokenized collateral in derivatives with Bitcoin, Ethereum, and USDC Original Link: The U.S. Commodity Futures Trading Commission [image]CFTC( has launched a pilot program that will allow tokenized digital assets to be used as margin collateral in U.S. derivatives markets, marking one of the most significant regulatory changes for cryptocurrencies since the passage of the law regulating stablecoins in the U.S. earlier this year.

The initiative aims to bring digital asset activity into U.S.-supervised markets and reduce reliance on offshore trading platforms, interim chair Caroline Pham said in a statement on Monday )8(.

During the first three months, eligible collateral will be limited to Bitcoin, Ethereum, and USDC, the stablecoin issued by Circle.

The program sets guidelines for futures brokers choosing to accept digital assets as customer collateral, including weekly reporting requirements and immediate notification of any operational issues.

New guidelines for RWA

The CFTC also released new guidelines outlining how real-world tokenized assets )RWA(, such as Treasury securities and money market funds, can be used within the agency’s existing regulatory framework.

The guidance addresses segregation, custody arrangements, valuation standards, and operational risks, and reiterates that the rules remain technology-neutral.

To pave the way for the new regime, the Division of Market Participants revoked Technical Advisory 20-34, a 2020 memo that restricted FCMs )Futures Commission Merchants( from accepting digital assets as customer collateral.

The agency stated the alert had become obsolete due to advances in tokenization and legal changes introduced by the digital asset regulation law.

CFTC’s work in crypto

The digital asset regulation law, passed in July this year, created a federal framework for non-security digital assets and expanded the CFTC’s authority over spot crypto markets and tokenized collateral.

Echoing the CFTC’s sentiment, the chief legal officer of a crypto trading platform commented Monday that the 2020 guidance represented a “concrete ceiling for innovation,” meaning insurmountable barriers that limit or prevent innovation.

“It was based on outdated information, far exceeded the bounds of regulation, and frustrated the objectives of the President’s Working Group on Digital Asset Markets,” he said.

The pilot project comes days after the CFTC, for the first time, authorized spot crypto trading on brokerages registered with the agency—an unprecedented move described by interim chair Pham.

Bitnomial, a Chicago-based platform long regulated as a derivatives market, is expected to launch leveraged spot trading this week, alongside its existing futures and options products.